For more information about Vanguard funds or Vanguard ETFs, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

Investments in bond funds are subject to interest rate, credit, and inflation risk.

Diversification does not ensure a profit or protect against a loss.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.

All investing is subject to risk, including possible loss of principal.

The idea that individuals should always receive investment advice that is in their best interest is unassailable. So is the idea that those who provide investment advice should be held to a fiduciary standard. In short, an advisor acts with good faith and trust. These are commonsense concepts that Vanguard fully supports.

We also support the Department of Labor’s (DOL) efforts to put these ideas into practice with a fiduciary rule. As the rule has moved through regulatory channels, we’ve weighed in with our concerns, feedback, and recommendations to help ensure investors receive the advice they need. A policy of this magnitude demands rigorous attention to detail. Every provision matters when we’re talking about helping investors make decisions about their financial future, and we’re committed to keeping advice accessible and affordable for everyone.

Be thorough. The current implementation plan calls for a piecemeal rollout of provisions. We believe a full review of the rule should be completed before any one element is made final. Changes need to be closely coordinated to minimize disruption for investors and redundancies or rework that would ultimately cost investors.

Be clear. The rule currently defines investment advice in broad terms. This sweeping definition brings with it regulatory requirements that are in some instances sensible but in many cases unnecessary. For example, we don’t believe anyone who encourages retirement plan participants to “save more” is dispensing advice in the same way as a financial planner who is making specific fund recommendations. The former is promoting a best practice, while the latter is acting as a fiduciary. Investors should have access to both types of advice, but they should not be governed the same.

Be consistent. As drafted, the rule makes unnecessary distinctions between how advice is delivered (online, in person, or a combination of the two); the topic of advice (such as questions about a rollover or investment decisions); and the type of client (different guidance applies to small and large retirement plans). This fragmented approach is confusing, and will ultimately increase the complexity and cost of advice. We recommend a streamlined, simpler governance structure.

Be efficient. We support efforts to address conflicts of interest and enforce violations when they occur, but the rule makes this process too complex and open to misinterpretation. The fiduciary standard will have little merit if advisors are unable to navigate a complicated list of requirements and face the risk of litigation if they fail to comply. Operational requirements should be more efficient and enforcement methods more streamlined in order to preserve investors’ access to advice. Let’s look to enforce existing standards using established and proven regulatory channels instead of adding a new layer of court oversight.

Be collaborative. The DOL’s fiduciary rule focuses on retirement investors, which is prudent given how many people need help planning for this complex financial stage. Yet, investment advice is not confined to retirement planning and investing. As this rule moves forward, we’ve asked the DOL to coordinate with its regulatory counterparts to ensure that any future fiduciary guidance takes a similar approach. Investors deserve a consistent experience, regardless of the type of account they own or the type of advice they seek. We understand that consensus is difficult to reach, so we’ve also urged the DOL to move forward with its rule as conversations with other agencies continue.

This rule has been years in the making and will fundamentally shape the availability and quality of investment advice. Clarity, certainty, and consistency are required if investors are going to benefit from the trusted advice that can mean the difference between meeting financial goals and falling short. Vanguard has been a vocal advocate for a fiduciary standard and will continue to fight for a well-crafted regulation that puts investors’ needs first.

Bill McNabb

F. William McNabb III is chairman and chief executive officer of Vanguard. Mr. McNabb joined Vanguard in 1986, became chief executive officer in 2008, and chairman of the board of directors and the board of trustees in 2010. Previously, he led each of Vanguard’s client-facing business divisions. Mr. McNabb is active in the investment management industry and serves as the chairman of the Investment Company Institute. He also serves as chairman of the board of directors of the Zoological Society of Philadelphia and on the board of the United Way of Greater Philadelphia and Southern New Jersey, the Wharton Leadership Advisory Board, and the Dartmouth Athletics Advisory Board. Mr. McNabb earned an A.B. at Dartmouth College and an M.B.A. at The Wharton School of the University of Pennsylvania.

Bart G. | April 20, 2017 8:34 pm

Could it be better, yes. Will more time make it much better…probably not. In the meantime, I just received a steak dinner investment pitch letter in the mail. Are the people that fall for that pitch and end up in a high cost annuity or non-publicly traded REIT are going to better or worse off with this delayed implementation? IMHO this would better fixed after implementation.

Vanguard welcomes your feedback on this blog, but please read our
commenting guidelines
first. Comments will be published at our discretion. Questions or comments about your Vanguard
investments or customer-service issues? Please contact us directly. Opinions expressed in blog
comments are those of the persons submitting the comments, and don't necessarily represent the
views of Vanguard or its management.

For more information about Vanguard funds or Vanguard ETFs, visit advisors.vanguard.com or call 800-997-2798 to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing.

Vanguard ETF Shares are not redeemable with the issuing Fund other than in very large aggregations worth millions of dollars. Instead, investors must buy and sell Vanguard ETF Shares in the secondary market and hold those shares in a brokerage account. In doing so, the investor may incur brokerage commissions and may pay more than net asset value when buying and receive less than net asset value when selling.

Investments in bond funds are subject to interest rate, credit, and inflation risk.

Diversification does not ensure a profit or protect against a loss.

Investments in stocks or bonds issued by non-U.S. companies are subject to risks including country/regional risk and currency risk.

All investing is subject to risk, including possible loss of principal.

About us

The Vanguard Blog for Advisors™ is an interactive way for you to join in the discussion with some of our top thought leaders as they offer their perspectives on a wide range of topics that affect you as an investment professional.

Keep in mind that our bloggers write from their own viewpoints. Their blog posts are not intended to be official statements made on behalf of Vanguard.